CRM Benefits for Customers : Literature Review (2005-2012)
Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 6, November- December 2012, pp.1578-1586
CRM Benefits for Customers : Literature Review (2005-2012)
Nastaran Mohammadhossein*, Dr.Nor Hidayati Zakaria Author**
*(Department Of Computer Science And Technology, UTM University, Malaysia) ** (Department Of Computer Science And Technology, UTM University, Malaysia)
ABSTRACT
CRM is a strategic approach that integrates people, business and technology to understand the needs of customers to be more satisfied. Customers are the vital key for each business and company to help them to grow. So, implementing CRM applications is one of the important tools that will help managers and companies to increase the satisfaction and loyalty of customers more than before. Beside this, there are some benefits which will affect on customers after implementing CRM. These benefits will help the customers to become happy and pleasant of using the companies that is offering their product and services from using CRM facilities. In this study, we find eight benefits of CRM which are important and beneficial for customers such as improve customer services, increased personalized service, responsive to customer's needs, customer segmentation, improve customization of marketing, multichannel integration, time saving, and improve customer knowledge. We reviewed previous studies, and identify these benefits which will affect on customers. Our result will help the managers and companies to know and recognize the factors and benefits of CRM which are more significant for their customers. So they can increase their customer's satisfaction and retention by more attention to these benefits.
Keywords - CRM, BENEFITS, CUSTOMER
I. INTRODUCTION
Customers are the critical factors in each business. In all companies, the loyal and the fixed customers are expecting more level of service qualifications, suitable transaction, and customized products. So it means that the companies should be informed of each customer to increase the loyalty and effectiveness. For this reason, CRM systems can help to change the way that each company is treated with customers and employees, to promote its revenue and obtain higher final profit. Nowadays, organizations are implementing Customer Relationship Management (CRM) applications more and more because CRM will help them to achieve a range of business benefits [1-2].
Moreover, Implementing CRM will consider as a set of information processes and
technology tools for enterprises that enable the firm
to expand its customer relationship management
[3]. It will raise the firms ability to earn profits and
generate higher-quality products or services. Based
on Gartner explanation, CRM is a business strategy
designed and implemented to help the firms and
companies to know and foresee the requirements of
their potential and obtainable customers. Discover,
attract, and find new clients and customers are the
vital aim of the CRM. Pay attention and be
responsible about those customers which are the
loyal customers, attract previous customers for
come to the company again, and lessen the cost and
money of promotion; marketing and customer
service are also goals of the CRM [4]
According to Winer [5] "this revolution in customer
relationship management...has created a worldwide
market for CRM products and services of $34
billion in 1999, a market that is forecasted by IDC
to grow to $125 billion by 2004." While there is a
huge investment in CRM implementation , still
there are many CRM initiatives that fail to
understand their proposed benefits [6] .
Although CRM has a huge impact on the
firms and organizations, there are some advantages
and benefits of implementing CRM which have a
direct impact on the customers, and will bring
customers satisfaction and improving retention of
customer. Assessing and finding the benefits of
CRM is a vital aspect of managing [7]. These
benefits will help the firms to find out the way that
increase effective relationship with customers and
finally will profit firms. Some studies classified the
benefits of CRM in terms of operational,
organizational, strategic, IT infrastructure, and
managerial. In our study, we want to find out the
benefits of CRM for the customers. Since the
customers are the critical key for each organization,
they will have a huge impact on making profit and
sales.
Considering that some of the effects of
CRM are multi-dimensional faceted, the objective
of this paper is to have literature review about the
CRM benefits. The CRM benefits will affect on the
customers needs and acquiescence that could be
extensible. Also the results can be comparable
across time, different systems and contexts.
.
II. CUSTOMER
RELATIONSHIP
MANAGEMENT (CRM)
In a general Customer relationship
management (CRM) is a business strategy, which
aims is acquiring new customers and retaining
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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering
Research and Applications (IJERA) ISSN: 2248-9622
Vol. 2, Issue 6, November- December 2012, pp.1578-1586
current customers to increase competitive
improving customers satisfaction. There are a
advantages. CRM helps firms preserve relationships
numbers of studies which have explored the
with customers that are directly connected
different aspect of CRM, such as CRM benefits.
competitive compensation. The basis of CRM is
Recently, some researchers are classified the CRM
relationship marketing, which aims are improving
benefits based on Shang and Seddon ,,s (2002)
the long-term profitability of customers through
enterprise systems benefit frameworks [6-7].
moving away from product-centric marketing to
Although this studies are very efficient in extracting
customer-centric.
the benefits of CRM, but still there is a lack of
More and more, firms understand the
CRM framework benefits which present the CRM
worth of establishing close relationships with
benefits from customers point of view. Considering
customers to growing retention. According to
customer as an end user who is interacting as an
Khalid Rababah [8] Knowing customers, will
external user with CRM applications, will help to
enable firms to serve them better and keep them
take out those benefits which are related to
loyal forever. This is the main theme of Customer
customer. Therefore, through reviewing the past
Relationship Management (CRM). Therefore ,
literatures, it is possible to find and extract those
Defining CRM is necessary for increasing and
benefits that are important for customers.
developing a clear perceptive and vision of what
CRM means to a business and organization while
III. CRM BENEFITS
the lack of such obvious understanding is
There are some problems regarding the
considered as an obstacle to successfully implement
benefits of CRM ,David [21] , as Managers did not
CRM [9].
know what kind of advantages the CRM system will
The CRM concept is used widely in
brings to a company. So management should have
cooperation of perform and research, while not for all time without fail [6] and also , Rigby [10]
at least the basic understanding or knowledge about CRMs benefit. The following lists of CRM benefits
[10][9][9][9] states that the majority of executives
are selected and minimized from a wide range of
can not immediately define CRM. Therefore, here
survey from latest CRM studies.
we present some definition to describe the meaning
With CRM systems customers are served
of CRM.
better on day to day process and with more reliable
In the other definition ,CRM is the
information their demand of self service from
combination of marketing efforts, business
companies will decrease. Therefore if there is less
processes and technology which will lets the firm
need to contact with the company for different
to know and recognize its customers from numerous
problems, customer satisfaction level increases [22].
perspectives [11].
Through Implementing CRM Companies can
In addition, a number of studies define
remove confusion that exists in the productivity,
CRM more holistically and they attempt to define
efficiency and control and every level through
CRM through its association with technology, and
appropriate use of CRM (Rushforth, 2007).
also as a business strategy [12-15].
In recent findings, the list of benefits will
On the other definitions , Kincaid [16]
be considered as a critical connection among CRM
defined CRM as a strategic tool that use of
initiatives and growth of customer equity. These
information, processes, technology, and community
central benefits of CRM will be connected
to handle the customers relationship with the
hypothetically to the three kind of equity that are
company departments such as marketing, sales,
relationship, value and brand, and in the end to
services, and support, during the customer life
customer equity[2]. Eight core benefits were
cycle, and Buttle [17] quoted that "CRM is an
recognized to provide value drivers.
integration of technologies and business processes
1. Enhanced ability to target profitable customers
used to satisfy the requirements of a customer
2. Integrated assistance across channels
throughout any given interaction. CRM involves
3. Enhanced sales force efficiency and effectiveness
achievement, analysis and exploit of knowledge
4. Improved pricing
about a customer to sell more goods more
5. Customized products and services
efficiently".
6. Improved customer service efficiency and
In the other literatures , CRM is defines as
effectiveness
an opportunity to increase profit, attracting and retaining "economically valuable" customers
7. Individualized marketing messages
though removing "economically invaluable" ones
CRM system helps companies to keep and record
[18-20].
the customer information, like their goals, needs
Consequently, by looking towards the CRM
and events. Moreover, saved knowledge is updated
definition, it is clear that satisfying the needs and
into the CRM system, so that the customers
requirements of customer is an important and
information will be up to date without being
significant part of CRM. Also, one of the vital
outdated. With these connections the information is
goals of firms through implementing CRM is
always expands in the CRM system that enhances
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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering
Research and Applications (IJERA) ISSN: 2248-9622
Vol. 2, Issue 6, November- December 2012, pp.1578-1586
the profile data for customers and works like a
Dimension
Reference year
strong instrument in making business decisions [23].
Improves
customer [27]
segmentation and assessment
2005
Greenberg [24] stated that through developing the total lifetime value of customer, CRM can raise the true economic worth of a business. Moreover successful CRM strategies promote customers to purchase more products, stay loyal for longer periods and be in touch effectively with a company. Curry and Kolou [25] quoted some benefits and reasons for adoption of CRM :
Customers from the competition will desire come your organization, Simplify customerfocused internal organization will make simpler the
Enable communication
through multiple selling
channels
The ability to gather [28]
customer data
identify the most valuable
customers and increase
customer retention is highly
desirable
learning
from
customers(customer
knowledge)
2005
infrastructure, decrease the workflow and remove non-productive information process, and Profits will increase from more satisfied customers and more integrated focused company.
Since adopting CRM will provide a lot of benefit in firms and their process, it would be helpful to clarify results and benefits of implementing CRM for them. Therefore, they will have a good background about the results and incomes from using CRM applications.
As we mentioned above, most of the previous studies on customer relationship management (CRM) focused mainly on exploring
Deliver the right product [29] and service in the right time from the right channel Channels for customers to give feedback Produce personalized and customizable product and services Institution of customer trust in CRM systems Information use and [6] capture
2005 2005
CRM benefits from organizational and managerial
Better
personalized
point of view, and there is a few studies that
service
specifically concentrate on customers point of
Being more responsive to
view. However, finding this benefits and reinforcing
customer requirements
them in the company will affect on the satisfaction
Closer relationship to its [30]
2006
of the customers. We had reviewed some of the
customers and offer phone
previous research and studies since 2005 to 2012
services
which were about the CRM and its benefits. It will help to find the benefits which are critical for customers. For this reason we reviewed around 60 papers and select those studies that were mentioned benefits of CRM for customers too. Because of the limitation of our domain search, only 15 papers were recognized that were exactly mentioned and discussed about the CRM benefits from customers sides. Of course, these studies and others had mentioned some other benefits of CRM form other views but, here we focused on the benefits which are for customers only.
Servicing customers and
receive information to
develop the level of service
offered to customers
Target
commercial [2]
customers
Offerings from different
channels
Enhanced
customer
service
Customized products and
services
2006
Advance responsiveness [31]
2009
Accelerate delivery lead-
times
Enable
customer
knowledge management
Develop
customer
Table1 : CRM customers benefits
Dimension
Reference
Enhanced customization [26]
of services and product
offerings
year 2005
segmentation Targeting the most profitable customers Improve product and business innovations
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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering
Research and Applications (IJERA) ISSN: 2248-9622
Vol. 2, Issue 6, November- December 2012, pp.1578-1586
Dimension
Reference year
Dimension
Reference year
Enhance customization of
communication
marketing efforts and
Customized products and
messages to individual
services;
customers
Improved
customer
Permit multi-channel
service efficiency and
integration
success
Allow multi-channel
Identify and target their [38]
2012
communication
best customers
Enable
personalized
Allowing the formation of
products and services
individualized relationships
Improve
product
with customers
separation
Identifying the most
Focus on customers and
profitable customers and
their needs
providing them the highest
Provide customers a
level of service
"one-to-one" skill
Understand and identify
Personalized services
[32]
2009
customer needs and
Customers knowledge
and experience empowered
Deliver high quality
IV. CRM BNENEFITS FOR CUSTOEMRS
service
According to the above table, and reviewing the
Meet
customer
needs(personalization)
Employee empower more
time to serve up customers
Advanced satisfaction
ratings
Targeted product and
service contributions can be
previous studies, we selected some of this benefits which are more significant in customers satisfaction. We summarize them into the following cases: Improve customer services Increased personalized service or one to one
service Responsive to customers needs
timed to match with
Customer segmentation
customer actions and
Improve customization of marketing
requirements
Multichannel integration
Individualization
of [33]
2010
Time saving
market
Improve customer knowledge
Customization of product
and services
According to table1 this benefits rate and
Improved responsiveness [34]
2010
frequency can be seen in the following fig1 .
Valuable time savings
during reduction of the
search effort
Seamless communication
Enhancing customers [35]
2011
attentiveness
Consolidating helpful
services
Describe
diverse [36]
2011
customer groups that will be
served in different ways
Customer service and
support service operations
Predict potential and personal customers behavior Improved capability to [37] target profitable customers Integrated contributions across channels Individualized marketing
2011
Figure1 : CRM customers benefits frequency Based on table1, we find the most repeated benefits for customers and tried to show the frequency of these benefits in fig 1. Based on this classification we can see these eight benefits frequency and numbers of repeat in these fifteen studies from customers point of view. So it is important to
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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering
Research and Applications (IJERA) ISSN: 2248-9622
Vol. 2, Issue 6, November- December 2012, pp.1578-1586
know and discuss about the vital benefits of CRM
produce a more satisfactory transaction, and over
that will impact on customers. For this reason,
time, a more satisfactory relationship. Personalized
having an overview about these dimensions will
service should simply be better service than routine
help the companies to know this importance.
service that does not take the individual's needs into
account."
A. Improve Customer Services
With a Personalize service companies
Customer Service is a communication
concentrate on what the customer desires to buy
among a customer and the company, frequently by
more than what the company wants to purchase.
usual channels like phone or email. Regularly the
Therefore, one to one service is a strategy to meet
customer will have a concern or request that wants
the customers needs and helps them to become
resolving. CRM services provide a business with
happy through providing personalize service.
the ability to produce, allocate and manage requests
made by customers. For example, Call Center
C. Responsive to Customer's Needs
software, which helps to connect a customer to the
CRM is not only application of
manager or person who can best assist them with
technology, although it is a strategy to study more
their existing problem, is one of the CRM abilities
about customers' needs and requirements to
that can be implement in the firms and
implement powerful relationships with them.
organizations. Recognizing and using of this type of
Customer responsiveness is providing customers
service can help to the companies to improve their
what they deal to obtain, nothing more, and nothing
clients knowledge to improve customer services
less. CRM is a strong tool to help the companies to
and also can increase efficiency and minimize costs
focus more proactive on their customer
[39].
responsiveness. CRM contains gathering
Personalized services, identify and reward
information about customers to discover better ways
profitable customers, creating and scheduling
to satisfy their needs.
appointments with customer, customization of
Focusing on customer needs and
marketing efforts and sending messages to
requirements, take the relationship one step further.
individual customers , providing multi-channel
It shows that companies can understand their
communication , and More responsive to customer
customers situations and needs [42]. Its the right
needs are some of the CRM applications ability
of each customer to want the companies for foresee
which can impact on customer service quality [6-7,
what will bring value to them through finding and
40].
addressing their unknown wants and needs. And,
A business with high service quality will
these unknown wants and needs must then be
satisfy customer needs while is remained
changed into new products and services. For this
economically competitive. Improving customer
reason, CRM is a significant tool that will help to
service quality is one of the important achievements
the companies to know and find the needs of their
of using CRM in each company. Based on Freeman
customers, and be responsible about them [43-45].
& Seddon [6] the major reasons for these
improvements were; information access and capture
D. Customer Segmentation
,increased personalized service , and being more
Segmentation is in center the process by
responsive to customer needs.
which objects or items are categorized or classified
into groups that split similar characteristics.
B. Increased Personalized Service (one to one
Although these characteristics, can be one or more
service)
attributes. It can be defined as a subdividing the
One-to-one service is about individuals
popularity based on already known good
and personalization. Communicating with, selling,
discriminator. In CRM , segmentation is used to
and servicing individuals by providing a particular
categorize customers according to some similarity ,
and significant personal experience can be
such as industry [46].
considered as personalize services. One-to-one
There are many techniques for classifying
service is an ability and skill of understanding a
and segmentation, but in this research we just want
customers needs and requirements by asking
to focus on the benefits of segmentation for
questions and listening to their answers, in addition
customers. Three ordinary group of segmentation
to observing their actions.
variables in consumer markets are demographics,
Therefore, personalize customer service or
psychographics and behavioral characteristics, like
one to one service provides companies to improve
loyalty status or benefits required.
understanding and knowledge about the customers
Segmentation or target marketing moved a
that the company cares about them and also to have
companys attention to balancing products and
better knowledge about their customers'
marketing efforts to be according customer needs.
preferences, requirements and wants.
Firms need to describe slighter and smaller
According to Dwayne Ball [41] " The rationale
segments to find customer needs and preferences
makes common sense: personalization should
[47]. Therefore, customers can be segmented to
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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering
Research and Applications (IJERA) ISSN: 2248-9622
Vol. 2, Issue 6, November- December 2012, pp.1578-1586
groups based on ages, gender, demographic and etc.
channels and incorporate it with other related
Though this, CRM will provide a capability of
information [52].
dividing customers based on their needs. It will help
companies to categorize their customers according
G. Time Saving
to their requirements into similar groups. CRM
Faster and quicker time to market is
application will facilitate the process of
significant to organizations looking for a
segmentation for companies.
competitive edge. It is also critical for customers to
have a fast respond in sale process from the
E. Improve Customization of Marketing
company and do not waste their time in buying
Customization of marketing means that,
process or product delivery. Organizations can take
the company or organization adapt and change its
benefit of CRM capabilities that simplify the
services or products based on presenting a unique
development and deployment cycle to respond to
product or services for each customer.
the customers. CRM systems bring in functionality
With the purpose of ensuring that customer needs
and enhancements, more quickly, at lower cost and
and requirements are met Customization is used by
enabling IT to be more responsive to business
the organization[48]. Firms can invest in
needs.
information gaining about customers and then
One of the useful benefits of using a CRM
customize their products as best as they can to
system is reduction in using paper in the company
contest customer interests.
or during interacts with customers. All processes
Moreover, communication can be
that were done by forms and paperwork can be
customized with customers for improving the
virtualized and mechanized within a CRM solution.
product or services for a specific customer. As the
Not only this process can save time and money
ability of CRM to customization of the services,
spent on paper, but it also makes a firm more
Customization of services and products is one of the
environmentally-friendly with customers.
benefits of CRM for customers [49].
CRM systems can store and organize every
detail of each individual and customer and easily
F. Multi Channel Integration
retrieval them. Sell person or employee can save the
Nowadays, the range of Customers channel
time of themselves and customers for searching
choice is changed and therefore, a winning CRM
about the information. In addition managers and
need to more efficiently manage customer
marketers of the company can better analyze
relationships inside a multichannel environment.
customer behaviors and trends in less time and then,
Technology, customer potential, and competitive
perform more systematic research about the
forces, are more and more convincing local
companys customer base and product
companies and firms to support customer service
offerings. CRM will let companies to interact with
operations from some delivery channels as much of
customers more frequently, by personalized
the customer knowledge occurs within this channel
massage and communication way which can be
environment.
produced rapidly and matched on a timely basis,
The multichannel integration development
and finally they can better understand their
has a important responsibility in CRM since it takes
customers and therefore look forward to their needs
the result of the business strategy and value-creation
[53].
processes and change them into value adding
communications with customers [50]. Multi-
H. Improve Customer Knowledge
channel integration can maintain all three phases of
Tracking customer behavior to customer
CRM which are acquisition, extension and
tastes and needs is a motivation for a firm to
retention. According to Goersch [51] multi-
implement CRM systems. Firms can make and
channel customers are more loyal and spend more
develop enhanced products and services through
than other customers. It is also valuable for retailers
using this information [54].Since Customer
that connect in CRM. Multi-channel integration is
knowledge is changing rapidly CRM applications
good for a transactional marketing approach, where
help organizational improve their knowledge about
retailers are just interested in effective customer
the customers by analyzing purchase behavior
achievement. Therefore, CRM strategy may needed
through different channels of the customers
all three phases to be implemented, multi-channel
customer [55]. CRM systems give a competitive
integration residue valuable although just one or
advantage in improving firms collection of
two goals are obtained [51].
customer information to customize product and
Multichannel integration shows the point
services according to customer needs.
of co creation of customer value in CRM. On the
According to Sunil Mithas [55] "Customer
other hand, a companys skill to perform
relationship management applications help firms
multichannel integration successfully , is heavily
gather and use customer knowledge through two
dependent on the organizations ability to collect
mechanisms. First, CRM applications enable
and bring together customer information from all
customer contact employees to record relevant
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